Classification of Large Taxpayers in the Philippines

By: Tax and Accounting Center Philippines

Large Taxpayer is a taxpayer who has been classified as such in accordance with the criteria under Revenue Regulations No. 1-1998 (RR No. 1-98), and has been duly notified by the Commissioner of Internal Revenue (BIR). This would mean that the two (2) requirements must be complied with before a taxpayer could be classified as large taxpayer in the Philippines. Once notified by the BIR, it shall continue to be classified as large taxpayer in the Philippines until notified by the BIR to be reclassified as a non-large taxpayer in the Philippines.

In reality, being large as to volume of operations is quite best, but being a large taxpayer for tax purposes may not be the best thing a taxpayer would wish for. First, the taxpayers have their own large taxpayer’s office where they have to coordinate with and it is a specialized office for large taxpayers in the Philippines. Second is that they are highly expected to be paying material taxes and the tax authorities are monitoring their compliance. Third, is that they are required more reports (e.g. monthly, quarterly, and annual tax reports in the Philippines) than a normal taxpayers as the tax authorities are looking closely on their compliance.

Hereunder are the criteria for classification of the Bureau of Internal Revenue (BIR) as large taxpayer in the Philippines and any or a combination of the following criteria would serve the purpose:

As to tax payment:

• Value-Added Tax (VAT) — Any taxpayer with net VAT paid or payable of at least P100,000 per quarter;
• Excise Tax — Any taxpayer with annual excise tax paid or payable of at least P1,000,000;
• Income Tax — Any taxpayer with annual income paid or payable of at least P1,000,000;
• Withholding Tax — Any taxpayer with annual withholding tax payment/remittance for all kinds of withholding taxes (i.e., on compensation, expanded, final and government money payment) of at least P1,000,000; (For taxpayers, business establishments and government offices with branches/units, the basis is the total annual taxes withheld by the Head Office and all the branches/units.)
• Percentage Taxes — Any taxpayer with percentage taxes of at least P100,000 per quarter; or
• Documentary Stamp Taxes — Any taxpayer with aggregate annual documentary stamp taxes of at least P1,000,000.

As to financial condition and results of operations:

• Gross Sales/Receipts — Any taxpayer with total annual gross sales/receipts of P1,000,000,000; and
• Net Worth — Any taxpayer with a total Net Worth at the close of each calendar or fiscal year of at least P300,000,000.

Being a top twenty thousand corporation in the Philippines is different from being a large taxpayer in the Philippines. Top-twenty thousand corporation does not necessarily mean a large taxpayer. If your company is classified as a large taxpayer in the Philippines, it is highly recommended that you keep abreast of the recent developments of the tax rules and regulations in the Philippines (e.g. VAT audit program for large taxpayers in the Philippines, electronic filing and payment of tax returns, etc.). Alternatively, you may closely coordinate with your large taxpayer’s division for the updates and new requirements.

Disclaimer: This article is for general conceptual guidance only and is not a substitute for an expert opinion. Please consult your preferred tax and/or legal consultant for the specific details applicable to your circumstances. For comments, you may please send mail at 

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